January C-Band Order Seen Spelling Out Auction Details, Maybe Incentives

The FCC is targeting freeing up 300 MHz of the band through an agency-run auction (see 1911180065). A host of questions remain unanswered, including what form of auction, what legal rights earth station operators have and if they're the same rights as licensees, and how they're to be compensated, said Renee Gregory of Willkie Farr. There are questions about transition administration, rules needed for allowing 5G use in the band while protecting fixed satellite service incumbents, and the balance of auction proceeds among incentive payments to operators, proceeds for the U.S. Treasury and money allocated for rural broadband, she said.

The biggest unknown is number of auction bidders, since that will affect auction proceeds, said Summit Ridge Group President Armand Musey. If T-Mobile buying Sprint goes through, New T-Mobile might not need midband spectrum, leaving AT&T and Verizon each seeking about 100 MHz each, he said. If it doesn't go through, more competitors wanting 100 MHz each could drive up prices, he said. Judging by international midband auctions, the 3.7-4.2 GHz could generate $30 billion or so, he said.

Speakers voiced confidence the FCC can get an auction done in 2020. That timing may also come up at a House Communications Subcommittee hearing Thursday (see 1912040028).

AT&T Senior Legal Counsel Michael Goggin said there's general agreement the auction should be familiar, like the clock auction used for the 24 GHz band. He said a January order might deal with the type of auction, but there needs to be a future proceeding on the transition plan. He said license size is likely not a January order issue but something to be addressed later. Musey said the initial order might tackle incentive issues, and that won't necessarily be the final word as there could be congressional or satellite pushback leading to a revision.

Technical rules to provide interference protection haven't received due attention, said Matt DelNero of Covington & Burling and NAB Associate General Counsel Patrick McFadden. Outside counsel for content companies in the proceeding, DelNero said reallocation could be quite complex because the band is the backbone of content delivery to MVPDs and broadcast affiliates. He said it's unclear how to get enough incentive to satellite companies so they invest in the new satellites needed to maintain service after a repack. and transition becomes questionable if there's an all-out fight between and among stakeholders and the FCC.

McFadden said the transition will have numerous moving parts, including new satellites and new compression technology, and filters installed on tens of thousands of earth stations. Making that work will involve some degree of guaranteeing satellite companies "stay in the tent" via incentives, he said. Musey said getting C-band satellite operators on the same page could be a challenge since they have different motivations; Intelsat is financially distressed "and it really needs a homerun," while the money issue is far less important to SES and, especially, Eutelsat. T-Mobile outside counsel Angela Kung of Mintz said the FCC has authorization under Section 309 of the Communications Act to incentivize the satellite companies, and excluding them would likely mean litigation.

Musey said the FCC has the authority to reallocate the band without incentivizing the satellite operators, since they don't have property rights in their licenses. Goggin said those license modifications can't be fundamental changes. He said there's a lot of disagreement about the FCC's Section 316 authority covering station license modifications.

Verizon Vice President-Federal Regulatory Affairs Patrick Welsh said the transition won't be as complicated as some indicate. He said getting it done quickly is of major importance because of global 5G midband deployments. AT&T's Goggin said speed is important, and the C-band ecosystem also must be preserved for video distribution. He said there are realistic questions about fiber's efficacy as a C-band substitute. He said that if fiber supplants it, that should be allowed to happen organically, while the FCC protects incumbent users.

America's Communications Association Senior Vice President-Government Affairs Ross Lieberman, criticizing the C-Band Alliance band-clearing plan as insufficient and incomplete, said the FCC needs to ensure C-band users get compensated. He said the agency needs a notice and comment period for a transition plan allowing cable operators flexibility to opt for fiber distribution replacing their use of the band for video distribution. He said the FCC and a neutral third party need to oversee the transition. Summit Ridge Managing Director Barlow Keener said satellite industry representatives declined invitations to speak.

Goggin said if the moving drags out, such possible outcomes as satellite and earth station owners losing the right to transmit in the lower portion of the band and their interference protections, or holding off on wireless users getting access to the spectrum until the transition is all done, are both bad: "You have got to plan this thing properly and execute it properly."

Wireless ISP Association outside counsel Steve Coran of Lerman Senter pitched a spectrum sharing regime in the C band allowing point-to-multipoint (P2MP) wireless services. He said sharing would work more easily there than the citizens broadband radio service band, which has tiers of access while the C band has no federal users. But DelNero said the post-repack interference environment already will be challenging, and adding P2MP services there "is really just a bridge too far."